IDEAS home Printed from https://ideas.repec.org/p/zbw/wuewwb/91.html
   My bibliography  Save this paper

Kleine Bundesländer: Achillesferse des Föderalismus?

Author

Listed:
  • Müller, Andreas
  • Fricke, Holger
  • Berthold, Norbert

Abstract

In this article we examine whether or not the small size (in terms of population) of some German Laender (states) is harmful. The economic theory of federalism forms the ground on which we present empirical evidence, focusing on our own results for the German Laender. We find evidence that political decisions on federal level instead of Laender level cause pref-erence costs, and so do decisions in big or merged Laender. On the other hand, economies of scale as an assumed advantage of big jurisdictions obviously do not influence the economic outcome very much. We do not find indications for strategic behaviour due to external effects either. Nonetheless, if external effects are regarded as a problem concerning "Stadtstaaten", they should rather be internalised by horizontal negotiations than by other instruments such as vertical payments or mergers between Laender. Hence, mergers of Laender do not seem to be a necessary precondition for decentralisation, which in turn is advisable as our results show.

Suggested Citation

  • Müller, Andreas & Fricke, Holger & Berthold, Norbert, 2006. "Kleine Bundesländer: Achillesferse des Föderalismus?," Discussion Paper Series 91, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    • Handle: RePEc:zbw:wuewwb:91
    as

    Download full text from publisher

    File URL: https://www.econstor.eu/bitstream/10419/22331/1/DP91.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gordon Tullock, 1969. "Federalism: Problems of scale," Public Choice, Springer, vol. 6(1), pages 19-29, March.
    2. Lars P. Feld & Gebhard Kirchgässner & Christoph A. Schaltegger, 2004. "Fiscal Federalism and Economic Performance: Evidence from Swiss Cantons," Marburg Working Papers on Economics 200420, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. R. H. Coase, 2013. "The Problem of Social Cost," Journal of Law and Economics, University of Chicago Press, vol. 56(4), pages 837-877.
    4. Buchanan, James M. & Goetz, Charles J., 1972. "Efficiency limits of fiscal mobility: An assessment of the tiebout model," Journal of Public Economics, Elsevier, vol. 1(1), pages 25-43, April.
    5. Berthold, Norbert & Fricke, Holger & Kullas, Matthias, 2005. "Standortwettbewerb der Bundesländer," Discussion Paper Series 80, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    6. Lammers, Konrad, 1999. "Regionalpolitik - Neugliederung des Bundesgebietes zwischen Standortwettbewerb und Finanzverfassung," Wirtschaftsdienst – Zeitschrift für Wirtschaftspolitik (1949 - 2007), ZBW - Leibniz Information Centre for Economics, vol. 79(7), pages 429-434.
    7. Robert P. Inman & Daniel L. Rubinfeld, 1997. "Rethinking Federalism," Journal of Economic Perspectives, American Economic Association, vol. 11(4), pages 43-64, Fall.
    8. Starrett, David A, 1980. "On the Method of Taxation and the Provision of Local Public Goods," American Economic Review, American Economic Association, vol. 70(3), pages 380-392, June.
    9. Homburg, Stefan, 1997. "Hat die Währungsunion Auswirkungen auf die Finanzpolitik?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 93-108.
    10. Olson, Mancur, Jr, 1969. "The Principle of "Fiscal Equivalence": The Division of Responsibilities among Different Levels of Government," American Economic Review, American Economic Association, vol. 59(2), pages 479-487, May.
    11. Baicker, Katherine, 2005. "The spillover effects of state spending," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 529-544, February.
    12. Feld, Lars P, 2000. "Tax Competition and Income Redistribution: An Empirical Analysis for Switzerland," Public Choice, Springer, vol. 105(1-2), pages 125-164, October.
    13. Hirsch, Werner Z & Marcus, Morton J, 1969. "Intercommunity Spillovers and the Provision of Public Education," Kyklos, Wiley Blackwell, vol. 22(4), pages 641-660.
    14. Kirchgassner, Gebhard & Pommerehne, Werner W., 1996. "Tax harmonization and tax competition in the European Union: Lessons from Switzerland," Journal of Public Economics, Elsevier, vol. 60(3), pages 351-371, June.
    15. Berthold, Norbert & Fricke, Holger, 2006. "Small is beautiful: Kleine Gebietskörperschaften erfüllen die politischen Präferenzen besser!," Discussion Paper Series 90, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Feld, Lars P. & Frey, Christian & Schaltegger, Christoph A. & Schmid, Lukas A., 2021. "Fiscal federalism and income inequality: An empirical analysis for Switzerland," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 463-494.
    2. Lars P Feld, 2004. "On Tax Competition: The (Un-)Expected Advantages of Decentralized Fiscal Autonomy," Marburg Working Papers on Economics 200425, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. Bofinger, Peter & Schnabel, Isabel & Feld, Lars P. & Schmidt, Christoph M. & Wieland, Volker, 2014. "Mehr Vertrauen in Marktprozesse. Jahresgutachten 2014/15 [More confidence in market processes. Annual Report 2014/15]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201415.
    4. Berthold, Norbert & Fricke, Holger, 2009. "Die Bundesländer im Standortwettbewerb," Discussion Paper Series 106, Julius Maximilian University of Würzburg, Chair of Economic Order and Social Policy.
    5. Burret, Heiko T. & Feld, Lars P. & Schaltegger, Christoph A., 2022. "Fiscal federalism and economic performance new evidence from Switzerland," European Journal of Political Economy, Elsevier, vol. 74(C).
    6. Helmut Seitz, 2008. "Minimum Standards, Fixed Costs and Taxing Autonomy of Subnational Governments," CESifo Working Paper Series 2341, CESifo.
    7. Hans-Günter Krüsselberg, 2005. "Milton Friedman und der Wissenschaftliche Beirat für Familienfragen Elternkompetenz und Anteilscheine am Schulbudget – Gedanken über Reformpotenziale," Marburg Working Papers on Economics 200506, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    8. Bernhard Seidel & Dieter Vesper, 1999. "Fiscal Federalism: An International Comparison," Discussion Papers of DIW Berlin 183, DIW Berlin, German Institute for Economic Research.
    9. Melle Marco C., 2014. "Eine europäische Bemessungsgrundlage für die Körperschaftsteuer? Konzeption und ordnungsökonomische Analyse / Conceptual design and constitutional economics analysis of a European tax base for corpora," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 65(1), pages 133-156, January.
    10. Robert Inman & Daniel Rubinfeld, 2002. "Subsidiarity, governance, and EU economic policy," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(04), pages 3-11, October.
    11. Michael Fotos, 2015. "Vincent Ostrom’s revolutionary science of association," Public Choice, Springer, vol. 163(1), pages 67-83, April.
    12. Bruno S. Frey & Alois Stutzer, "undated". "The Role of Direct Democracy and Federalism in Local Power," IEW - Working Papers 209, Institute for Empirical Research in Economics - University of Zurich.
    13. Bruno S. Frey, 2001. "A Utopia? Government Without Territorial Monopoly," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 157(1), pages 162-175, March.
    14. Faggini, Marisa & Parziale, Anna, 2011. "Fitness landscape and tax planning: NK model for fiscal federalism," MPRA Paper 33770, University Library of Munich, Germany.
    15. Pierre Salmon, 2006. "Horizontal Competition Among Governments," Chapters, in: Ehtisham Ahmad & Giorgio Brosio (ed.), Handbook of Fiscal Federalism, chapter 2, Edward Elgar Publishing.
    16. Frey, Bruno S. & Eichenberger, Reiner, 1996. "FOCJ: Competitive governments for Europe," International Review of Law and Economics, Elsevier, vol. 16(3), pages 315-327, September.
    17. Mann, Stefan & Wustemann, Henry, 2008. "Multifunctionality and a new focus on externalities," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 37(1), pages 293-307, February.
    18. Martijn Huysmans & Christophe Crombez, 2020. "Making exit costly but efficient: the political economy of exit clauses and secession," Constitutional Political Economy, Springer, vol. 31(1), pages 89-110, March.
    19. Alain Marciano, 2019. "Buchanan and public finance: The tennessee years," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 32(1), pages 21-46, March.
    20. Lars Feld, 2014. "James Buchanan’s theory of federalism: from fiscal equity to the ideal political order," Constitutional Political Economy, Springer, vol. 25(3), pages 231-252, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:zbw:wuewwb:91. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ZBW - Leibniz Information Centre for Economics (email available below). General contact details of provider: https://edirc.repec.org/data/viwuede.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.